Alan Greenspan said the U.S. housing market will begin to recover in the first half of 2009, according to an article he wrote for Emerging Markets magazine published Friday.

Greenspan wrote that the recent slowing in the rate of decline in U.S. home prices is the first positive note in the year-long trauma and that eventually, frozen credit markets will thaw "as frightened investors take tentative steps towards reengagement with risk."

"More conclusive signs of pending home price stability are likely to become visible in the first half of 2009," he wrote.

Once the housing market finds it footing, markets will be able to tackle the core issues of the credit crisis.

But a big question remains, he said: "How much overall deleveraging is going to be required to induce global investors to again become committed holders, at modest interest rates, of the liabilities of the world's financial intermediaries?"

Beyond that, the amount of additional bank capital required to stabilize the financial system remains in question as well.

Greenspan said one sign that the necessary level of bank capital had been reached will be when the U.S. dollar Libor/OIS spread is restored to its pre-crisis level of 15 basis points or less, down from its current level of around 300 basis points. The spread expresses the expected future three-month premium based on London interbank offered rates (Libor) over anticipated central bank rates, or Overnight Index Swap (OIS) rates -- a key measure of financial market stress.